Morning Commentary
Yesterday was another session that began with trepidation, only to end in a flurry of buying.
And the Magnificent Seven returns. Some are asking: ‘please never leave.’
Dot Plot
The infamous Fed’s Dot Plot got decidedly more hawkish in September, suggesting only a 2.7 basis point decline in Fed funds to 2.9% by the end of 2026.
Fed Funds Target |
2023 |
2024 |
2025 |
Long Run / 2026 |
June |
5.6 |
4.6 |
3.4 |
2.5 |
September |
5.6 |
5.1 |
3.9 |
2.9 |
With a closer look at the ‘dots’, one can see two distinct camps:
The question is: which camp has the moment today?
These days, everyone is playing the fed rate cut guessing game. A Reuters Poll of 500 bond economists released a day ago sees the following:
So, investors know there will not be a hike today and many think Powell will hint at rate cuts. That’s aided the Volatility Index (VIX) easing down to the lowest level in decades.
Rally Baton or More Hurdles
According to Bespoke Research, the market has rallied 9.6% since the November Federal Open Market Committee (FOMC) gathering. That is the best post-FOMC meeting move since August 2009 (10.4%).
Can that continue, or will it be why Powell puts hurdles in the way?
Powell plays it safe, but the Street will view it positively.
Today’s Session
The Produce Price Index (PPI) report shows a cool down in inflation prices. Overall, this, and yesterday’s CPI, may give confidence to the Fed.
All categories continue to see a decline. Services and other goods price slowed as well.
Tweet |
5/3/2024 1:41 PM | Cheering the News |
5/3/2024 7:33 AM | TIM COOKS THE (RECORD) BOOKS |
5/2/2024 1:54 PM | Holding Up |
5/2/2024 9:41 AM | COOL HAND POWELL |
5/1/2024 1:22 PM | Which Powell? |
5/1/2024 9:40 AM | MAY DAY, MAY DAY, MAY DAY |
4/30/2024 1:02 PM | Complete Flop |
4/30/2024 9:48 AM | CHIPS TAKE THE LEAD |
4/29/2024 1:39 PM | Musk Rides Back to the Mag Seven |
4/29/2024 9:50 AM | DIE BY THE SWORD, PROSPER BY THE SWORD |
4/26/2024 1:46 PM | Full Steam |
4/26/2024 9:39 AM | BIG TECH STEPS UP |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
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